The U.S. District Court for the Southern District of New York recently denied Coinbase's motion to dismiss the SEC case, marking a significant setback for the company. With the lawsuit now entering the discovery phase, both parties can request evidence and documents, setting the stage for a lengthy legal dispute.

In response, the SEC emphasized the importance of economic realities in determining whether a crypto offering constitutes a security, highlighting the legal framework used for almost 80 years.

Since entering the discovery phase, strategists believe Coinbase has an opportunity to gather evidence that could weaken the SEC's case, similar to Ripple's successful defense strategy during its legal battle.

Representing Coinbase, Paul Grewal expressed disappointment and readiness to proceed following the court's decision. Despite setbacks, Grewal is confident in their legal arguments and aims to gather evidence from the SEC to support their position.

Looking ahead, Eleanor Terrett noted that legal proceedings could last for over a year, with potential challenges such as interlocutory appeals. However, Coinbase remains committed to vigorously contesting the lawsuit for a favorable outcome similar to Ripple's case against the SEC.